With Romania fast becoming a promising country among expats, tourists, and investors, much has been said about owning property in this country. Beautifully steeped in history, with great landscapes and affordable living costs, Romania is an interesting place that invites a lot of opportunities regarding real estate purchases. If you are considering investment in Romanian property, you may be asking yourself: can a foreigner buy property in Romania? This article investigates the regulations, processes, and considerations one will have to follow in the case of buying property as a non-Romanian citizen.
Understanding Property Ownership for Foreigners in Romania
The short answer is yes, foreigners can own property in Romania. However, the legal frameworks governing property ownership differ widely based on a number of variables, especially in terms of the type of property to be purchased and the nationality of the buyer. Below, we will be discussing the main characteristics of property ownership for foreigners in Romania, including the types of property, legal requirements, and the process for purchase.
1. Types of Properties Available
Foreigners can buy different types of properties in Romania, such as:
a. Residential Properties
Residential properties include apartments, houses, and villas. In these cases, foreigners are allowed to acquire them directly without opening a local company. However, certain conditions still prevail depending on the status of the buyer: EU or non-EU citizen.
b. Commercial Properties
Apart from residential properties, foreign investors can invest in commercial ones, which include office buildings, retail stores, and other industrial property. The same rules might apply as in residential, but the normal case is that commercial real estate is often the subject of more complicated regulations and considerations.
c. Land Purchase
The issue of buying a land is a bit more complex in the case of foreigners. For the EU citizens, buying land is easier. For non-EU citizens, there are some more restrictions, and usually, they have to open a Romanian company to purchase land.
2. Legal Framework for Foreign Ownership
a. EU Citizens
It is quite easy for EU citizens to purchase property in Romania: they have equal rights with Romanian citizens and have free access to the acquisition of residential and commercial property. They also can buy land, under certain conditions provided by the law.
b. Non-EU Citizens
When it comes to non-EU citizens, things get more complicated. According to Romanian legislation, foreigners from outside the EU are not allowed to own land in their names. In order for them to purchase land, they either have to
1. Company Formation in Romania: It is possible for non-EU citizens to establish a company in Romania that can subsequently buy land. This would imply the registration of the company, certain legal requirements, and ensuring that the company will comply with Romanian business legislation.
2. Buy Land through Long-Term Lease: This is another choice for foreigners coming from outside the EU-the long-term leasing of land, often to a maximum period of 99 years. In this case, the foreigner enjoys use of the land without owning it.
3. The Buying Process
After understanding the legal backdrop, you are ready to go ahead and start the buying process. Here is a step-by-step guide:
Step 1: Do Your Research
Preamble Carry out detailed research concerning the real estate market in Romania, focusing on your specific area of interest, the prices of properties, amenities available in those areas, and local legislation. Some cities quite attractive to foreign investors include Bucharest, Cluj-Napoca, and Brasov.
#### Step 2: Hire a Local Real Estate Agent
An expert local estate agent will now be able to help you through the market, finding properties that meet your criteria and assisting with negotiations. Their knowledge of the local market will prove invaluable.
Step 3: Engage a Lawyer
It is essential to involve an attorney-at-law specializing in real estate law within Romania. In this manner, an attorney-at-law can confirm that all legalities are complied with, due diligence will be executed, and he will aid in drafting the required contract. An attorney will have the capability to examine the title of the property for liens.
Once you have found an appropriate property, you will typically sign a promissory sales contract, known as a “promissory contract”. The conditions of sale are written in this document, including the price of the purchase and the payment schedule. A deposit at this point is usually given, which is typically 10% of the purchase price.
Step 5: Permissions Required
Depending on the type of property and your citizenship status, certain approvals or permits may be required. For example, non-EU citizens buying land through a company will need to ensure all company registrations are in order and conform to Romanian law.
Step 6: Finalize the Purchase
The final step involves the signing of the notarial deed of sale before a public notary. That document is officially a transfer of ownership over the property. It requires the presence of the buyer and the seller. In this case, you can pay the various taxes and fees that may be required.
4. Financial Considerations
Buying property in Romania has some financial considerations:
a. Costs and Fees
Added to the purchase price, a buyer will also have to bear some other fees when buying property in Romania. These include the following:
Notary fees: These can range from 0.5% to 1.5% of the value of the property.
Land Registration Fees: Usually 0.5% of the property value.
Property Transfer Tax: Generally at 3% of the value of property purchases over a certain amount.
– Legal Fees: You are likely to engage a lawyer, and the cost will vary depending on the complexity of the transaction.
b. Financing Options
If you contemplate financing your house purchase, consider that Romanian banks may apply different lending policies for foreign buyers. However, EU citizens face fewer problems in accessing credit, while non-EU citizens may find their conditions more strict or require bigger down payments.
5. Possible Problems
While Romania offers an intriguing perspective in investing in real estate, challenges one may face include the following.
a. Legal Problems
Buying Romanian property is a complex procedure and process. There are many legal complications, especially for those coming from non-EU countries. Extra care should be taken in order to ensure that all the legal formalities are followed to avoid problems in the near future.
b. Volatility of the Market
Like any other real estate market, Romania has seen ups and downs. Updates on economic trends and property prices in the country are relevant.
c. Cultural Differences
It is necessary to understand the local customs and the way business is done. Good relations with local agents, lawyers, and stakeholders will help promote easier transactions and interaction.
After buying a property in Romania, long-term residency might cross your mind. Owning property in Romania does not automatically provide residency, but it is a plus. Long-term visas or residence permits could also be applied for by foreigners, depending on the case: for work, studies, or family reunification.
Conclusion
In brief, foreigners can acquire real estate in Romania, although with different procedures according to nationality or type of property. EU citizens have fewer restrictions, while foreign citizens outside the EU have partial difficulties, especially in respect of land ownership. Local involvement, proper research, and following the letter of the law will be able to help foreign investors take care of their interests in the Romanian real estate market.
With its beautiful landscapes, vibrant culture, and an economy on the rise, Romania surely stands as one of the most sought-after countries in matters of property investment. Be it a vacation home, a house for rental purposes, or a permanent residence-the possibilities are endless. Take well-informed steps and comprehend the legal requirements to bring your dream of owning property in Romania into reality and embark on a new life chapter in one of the most interesting countries of Europe.